Notes 21st September

Review of the Course 1. Basic Case of Valuation (Input vs Output presentation) To derive the value per share 2. BodyShop International: Forecasting statements (by calculating Ratios)-technical note Plug Value (diff betn assets and equity side): could be debt or cash or marketable securities or investments 3. BE analysis: BE Point, BE chart, DOL, DFL, DCL, ROI, ROE Using Data Table – BE Model 4. Apple: Dupont Analysis: ROI-NPM, TATO; ROE-NPM, TATO, EM or leverage- interpretation of ratios 5. Time Value of Money Case: Rent vs Buy- Rent Vs Buy 6. Combo boxes: Data validation 7. Bond Valuation: Coca Cola Yield Calculation – Price & Yield Function 8. Exchange Rate Forecasting: Home Care: APV – sensitivity 9. State of South Carolina – Equity market related calculations 10. Macros, Code for one or two simple functions: PVIF, PVIFA 11. Application of Array Functions Checklist: 1. Extensive use of What-if ( scenario, goal seek, and data table) 2. Application of data validation tool while building a model 3. Use of array functions: MMULT, transpose 4. NPV, IRR, XIRR, MIRR, STATISTICAL functions, SUMPRODUCT (Limitation of NPV – does not take into consideration the initial investment so use the function for C/Fs from 1 st yr onwards and then subtract the initial investment to get final value of NPV) (XIRR- when the C/Fs are not given for uniform time intervals)(Compound till terminal yr and then the lump sum amount discounted to get this discount rate MIRR) 5. Writing Macros for specific uses in finance & using the VBA code Objective for today: 1. Monte Carlo simulation 2. Preparing a loan amortization table:

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Transcript of Notes 21st September

Review of the Course1. Basic Case of Valuation (Input vs Output presentation)

To derive the value per share2. BodyShop International: Forecasting statements (by calculating Ratios)-technical note

Plug Value (diff betn assets and equity side): could be debt or cash or marketable securities or investments

3. BE analysis: BE Point, BE chart, DOL, DFL, DCL, ROI, ROEUsing Data Table – BE Model

4. Apple: Dupont Analysis: ROI-NPM, TATO; ROE-NPM, TATO, EM or leverage- interpretation of ratios

5. Time Value of Money Case: Rent vs Buy- Rent Vs Buy6. Combo boxes: Data validation7. Bond Valuation: Coca Cola Yield Calculation – Price & Yield Function8. Exchange Rate Forecasting: Home Care: APV – sensitivity9. State of South Carolina – Equity market related calculations10. Macros, Code for one or two simple functions: PVIF, PVIFA11. Application of Array Functions

Checklist:

1. Extensive use of What-if ( scenario, goal seek, and data table)2. Application of data validation tool while building a model3. Use of array functions: MMULT, transpose4. NPV, IRR, XIRR, MIRR, STATISTICAL functions, SUMPRODUCT (Limitation of NPV – does not

take into consideration the initial investment so use the function for C/Fs from 1st yr onwards and then subtract the initial investment to get final value of NPV) (XIRR- when the C/Fs are not given for uniform time intervals)(Compound till terminal yr and then the lump sum amount discounted to get this discount rate MIRR)

5. Writing Macros for specific uses in finance & using the VBA code

Objective for today:

1. Monte Carlo simulation2. Preparing a loan amortization table:

Using regular fns in excel, VBA3. BodyShop International4. In-Class Asgt

(1- Deustche Bank: Finding relative Value trades, bonds(2- Apollo Tyres- Investment Valuation